Tharman Shanmugaratnam
Singapore
“EDB conducts regular reviews to GIP to ensure its effectiveness in attracting only top-tier business leaders who are interested to drive the growth of their businesses and investments from Singapore.”
“MAS may vary the size of the additional capital requirement imposed on the bank and take other regulatory actions depending on the outcome of ongoing reviews. MAS requires all retail banks in Singapore to ensure that their mission critical systems supporting digital banking are resilient.”
“This question will be answered in the reply to Dr Tan Wu Meng's Parliamentary Question filed for tomorrow's Sitting. [Please refer to "Probe into Recent Disruptions of DBS' Digital Bank and Physical ATM Services and Preventive Measures Implemented", Official Report, 5 July 2023, Vol 95, Issue 107, Written Answers to Questions for Oral Ans…”
“Borrowing from the banks is one of the ways in which MAS carries out MMOs to soak up such excess liquidity. Like other central banks, MAS does this daily through an auction system, enabling MAS to withdraw liquidity through the Primary Dealers that submit the most competitive prices.”
“To mitigate consumer over-indebtedness, the Monetary Authority of Singapore (MAS) requires financial institutions (FIs) to implement a range of safeguards when extending mortgage loans and unsecured credit.”
“The Monetary Authority of Singapore imposes on external asset managers the same stringent regulatory standards for anti-money laundering and countering the financing of terrorism that it imposes on banks.”
The complete record
Every one of 2,416 lines we hold for Tharman Shanmugaratnam, in date order, each linked to its source. Free to read, in full, without an account. Page 7 of 49.
“These include electronic wallets that can be downloaded to everyone's mobile phones easily, and wearable devices that operate similarly like wallets and can be topped up by family members conveniently. An example is the Post Office Savings Bank Smart Buddy, which is a watch that children can use to buy food at school canteens. A similar device can be developed and customised for use by the elderly. We will continue to monitor accessibility to banking and payment services and work with the industry to ensure that Singaporeans' needs can be most conveniently met.”
“A high proportion of Singaporeans have bank accounts. While we do not have the exact numbers, based on the 2014 World Bank Global Findex survey, 96% of Singapore residents above the age of 15 have bank accounts. The figure would be higher for adults. Another source of information comes from the Goods and Services Tax Voucher Scheme. About 40,000 Singaporeans have encashed the cheques they receive under the scheme, which could be because they do not have bank accounts. About 80% of local banks' customers hold either an automated teller machine (ATM), debit or credit card. Within this group, more than 90% of customers aged between 16 and 59 hold a card; for customers aged 60 and above, the percentage is 70%. Those who are under the age of 16 generally do not hold cards. This is not surprising, given that child accounts are normally set up to accumulate savings and not for transactional purposes. Parents can, however, apply for ATM or debit cards for their children and set the appropriate withdrawal and spending limits for their children. To ensure that Singaporeans have access to affordable and convenient basic banking services, major retail banks in Singapore already offer Basic Banking Accounts and these have been available since 2002. Such accounts, which generally come with ATM/debit card and Internet banking services, can be maintained at very low cost. In fact, some banks provide the service free for school-going children and the elderly by waiving the account service fees. The Monetary Authority of Singapore is also working with the industry and retail merchants to develop and promote new electronic payment options that are widely accepted and convenient to use, and which may not require the user to have a bank account or bank card.”
“The interoperability between the two local bank ATM networks is a further step that MAS has raised with the banks. It should yield efficiency gains in the system as a whole and allow for a redistribution of ATMs in the long term to maximise convenience to customers. However, to achieve efficiency gains, the number of ATMs may need to be scaled back in some locations, which could affect queuing times in those places. Beyond ATMs, banks have also sought to improve Singaporeans' access to cash withdrawal services in other ways. They have partnered major retail outlets, such as 7-Eleven, Sheng Siong and Giant, to offer fast and easy cash withdrawals as part of consumers' shopping experience. Most fundamentally, however, as I have mentioned earlier, we are working with the industry to develop widely accepted electronic payment options that are easy to use, even for the elderly. With more cashless alternatives, our reliance on cash for transactions and the need for ubiquitous ATMs should decline over time. Singapore, as a compact city, needs to navigate this transition well and become a city ready for the future, and a bright spark in the digital world. At the same time, we will ensure that the transition is inclusive and no one will be left behind as we journey towards being a Smart Nation.”
“Our agencies, especially MAS, the Smart Nation and Digital Government Office, the National Environment Agency and the Housing and Development Board (HDB) are working together to find ways to improve the day-to-day electronic payments experience in the heartlands, taking care to ensure that solutions should consider the needs of all, from the young to the old. The agencies are also crowdsourcing ideas from the private sector, so as to co-create solutions that will make electronic payments ubiquitous at hawker centres, HDB coffee shops, and heartland shops. To be clear, while we promote electronic transactions, the Government is not targeting to phase out cash entirely. There will always be a group of Singaporeans who face practical challenges in accessing digital banking services, and cash will remain important to them. MAS will continue to monitor and work with the industry to ensure that basic cash services remain accessible to those who need them. In this connection, Mr Patrick Tay asked if we should require all ATMs of banks to be interoperable so as to make cash withdrawal points more accessible to residents. We are actually approaching this from a position of advantage. Singapore is already well-served by ATMs. Our ATM coverage is significantly higher than in other city states, such as Hong Kong. The two biggest networks in Singapore are operated by DBS/POSB and the United Overseas Bank/Overseas-Chinese Banking Corporation. At least 90% of HDB households can find ATMs from both networks, that is, an ATM from their own bank, within 500 metres of their homes. Many working adults and students will also have access to ATMs near their places of work or study or along their daily commutes.”
“As a start, the Monetary Authority of Singapore (MAS) will work with banks and community leaders to run outreach programmes, through community clubs, Residents Committees and senior citizen centres, to assist those without a bank account to open an account. There is also a significant group, mostly the elderly, who have a bank account but rely primarily on cash to perform transactions. For this group, we want to help them acquire the basic skills, as well as the confidence, to perform simple electronic transactions. The Infocomm Media Development Authority has implemented the Silver Infocomm Initiative to promote information technology awareness and literacy, including use of electronic transactions, among seniors aged 50 and above. To date, about 130,000 seniors have benefited from the programme. SkillsFuture Singapore will be running a national programme, called SkillsFuture@Digital Workplace, to help anyone gain confidence in the use of technology, including using mobile banking apps, signing up for PayNow, and making electronic payments. MAS will work with the industry and community leaders to further expand on these public outreach and education efforts. The purpose of encouraging electronic payments is to bring about greater convenience for everyone. Electronic payments must, therefore, offer clear benefits over cash for consumers and merchants. They should be simple to use, cheap and accepted everywhere. When we achieve that, the need to go to an automated teller machine (ATM) will be far less, and this will greatly benefit the seniors. One can just go directly to his or her favourite hawker stall and pay electronically with a card, mobile phone or even a watch.”
“According to World Bank estimates, 96% of Singapore residents above the age of 15 have bank accounts. The figure would be higher for adults. Another source of information comes from the Goods and Services Tax Voucher Scheme. About 40,000 Singaporeans have encashed the cheques they receive under the scheme, which could be because they do not have bank accounts. To make it easy and affordable for Singaporeans to open bank accounts, major retail banks have offered Basic Banking Accounts, or BBAs, since 2002. While the exact features differ from bank to bank, these BBAs generally operate like normal savings accounts and offer unlimited ATM transactions, access to Internet and mobile banking services. The cost of opening and maintaining a BBA is very low. An individual needs only an initial deposit of $20, sometimes even less. For instance, the Development Bank of Singapore (DBS)/the Post Office Savings Bank (POSB) does not require any initial deposit for the opening of its POSB Everyday Savings Account. The bank also waives the account balance fall-below service fee for children, the elderly, full-time National Servicemen and recipients of public assistance. Nonetheless, some Singaporeans remain unbanked. This may be due to low awareness of the availability of BBAs or by choice. The move towards electronic payments has necessitated a fresh look into our efforts to encourage Singaporeans to set up bank accounts. This needs to be done on a national basis, with the Government working in partnership with the banks, retail merchants and community leaders.”
“Financial institutions (FIs) are allowed to offer reverse mortgages. In fact, some FIs did offer reverse mortgages in the past but ceased doing so when they found a lack of demand. The terms for reverse mortgages, including applicable interest rates, are set on a commercial basis, taking into account factors, such as cost of funding and credit risk. The Government has been looking at options to help Singaporeans better monetise their housing assets. For example, MAS announced in March 2017 that mortgage equity withdrawal loans need not be subject to the total debt servicing ratio (TDSR) framework if the loan amount is less than 50% of the market value of the property. This will help retirees – many of whom would have paid up most of their outstanding housing loan – monetise part of the value of their property. There are alternatives to reverse mortgages or mortgage equity withdrawal loans. For instance, a property owner can choose to let out his property or a room for rental income. Eligible HDB flat owners may also monetise or right-size their flats through HDB's Lease Buyback Scheme or Silver Housing Bonus respectively. The Government will continue to review its policies to facilitate monetisation options that are relevant to meet the retirement needs of Singaporeans.”
“Policyholders could approach their insurers, insurance agents or financial advisers for help in considering these options.”
“Between 2011 and 2016, the percentage of life insurance policies/savings plans in-force with licensed insurers in Singapore which were surrendered each year increased slightly from 3.2% to 3.6%. The absolute number of surrendered policies was about 196,000 in 2016. These include policies surrendered voluntarily for reasons other than an inability to continue premium payments. In comparison, the surrender rates in Hong Kong from 2011 to 2016 range from 3.6% to 4.4%. In the European Union and Switzerland, the rate is 5% to 6%, based on data from 2010 to 2014. Life insurance policies are designed to yield the intended benefits only if the policies are held for their full terms. Therefore, there are rules requiring insurance agents and financial advisers, in recommending these policies, to conduct a proper client needs analysis, including the financial ability and willingness of their clients to commit to premium payments for the full term of the insurance product. MAS does not require insurance agents and financial advisers to advise their clients that they can sell their life insurance policies in the secondary market. Whilst this is possible, some policyholders may be concerned that potential owners of these policies will benefit from the death or disability of the life insureds1, even though they are unrelated to the life insureds. However, if policyholders find themselves unable to continue paying their premiums, they could avail themselves of various options provided by insurers. These include obtaining a loan against the policy value from the insurer to pay for the premium, surrendering the policy for a sum of money, or reducing the protection coverage.”
“These include (a) a broad suite of indicators to monitor any build-up of risks in the system; (b) model-based approaches to assess systemic risk and policy effectiveness; (c) stress tests to understand how adverse scenarios could affect individual FIs as well as the financial system; and (d) network analysis to assess how financial distress could spread from one FI to others in the system through various interconnections. These tools help MAS identify common vulnerabilities across FIs and in the corporate and household sectors, as well as the channels by which risks can propagate through the financial system. MAS has also identified a group of domestic systemically important banks (D-SIBs).5 These D-SIBs are subject to additional regulatory requirements, such as higher capital and liquidity buffers, enhanced disclosure, and recovery and resolution planning, to strengthen their resilience. MAS is committed to proactive surveillance and robust supervision to safeguard the stability of the financial system in Singapore. The International Monetary Fund's Financial Sector Assessment Programme in 2013 found Singapore's financial sector to be well-regulated and supervised and described the regulatory and supervisory framework as "among the best globally".”
“The Monetary Authority of Singapore (MAS) promotes financial stability in Singapore through microprudential supervision of individual financial institutions (FIs), as well as conducting macroprudential surveillance of the financial system as a whole. The two are related and closely coordinated to provide a comprehensive approach to preserving a stable and sound entire financial system. In its microprudential supervision, MAS covers all FIs – banks, insurers and capital market players. Only well-managed and reputable FIs are allowed to operate in Singapore. Once admitted, FIs must continue to meet the necessary regulatory requirements and standards. In designing these requirements, MAS draws reference from global standards and best practices, consults industry and other stakeholders, and carries out impact studies. This allows MAS to consider potential spillover effects of regulations on the broader economy and financial system and finetune the regulations as appropriate. This is further complemented by onsite inspections and regular offsite reviews of FIs' operations to check that they are managing their risks properly. In this regard, MAS adopts a risk-focused supervisory approach, paying closer attention to FIs that are more systemically important. As for macroprudential surveillance, MAS seeks to identify potential financial stability risks arising from global and domestic economic and financial market developments. Like other major regulators, we want to identify these risks before they materialise, so that appropriate measures can be taken to avert systemic problems. MAS employs a variety of tools to do this.”
“I am glad Mr Cedric Foo has raised this point and it is something which I referred to earlier. We are mindful of the fact that, for the older population, this does not come easily, so we do need to provide physical access. But the key strategy going forward is to maximise the use of digital modes, be it Internet or mobile, every way in which we can move away from cash and also improve the efficiency or the whole system, which means bringing down the cost of the payment system as a whole. That is the key strategy; and the Member has put it very well.”
“It is a national average. Let me reiterate one point. We have, in fact, the densest network of ATMs internationally. Of course, it is not easy to compare across countries because there are very obvious geographical differences, but if I compare it with Hong Kong, which is the closest to us in its geographical and density characteristics, we have significantly more ATMs than Hong Kong, in fact, more than one-third more ATMs per kilometre. I am not saying that that is the only benchmark. We do want to improve the availability of basic banking services around the island. We will look at the ATM network to see whether access can be further improved, but it is not the only solution.”
“My sentiments are in line with Members on this. We do want to have adequate coverage of basic banking services. We have to break that down into cash withdrawals, cash deposits, transfer of funds and different services which are used by different segments of the population. An ATM is not the only solution. It does cost something and it is not the only solution. We should maximise availability of other cash withdrawal touchpoints across the island. I am glad that the banks are doing this, not just with 7-Eleven stores but other stores, in a way that is convenient to residents. So, let us take a holistic view, maximise access for the normal, basic transactions people need to make and be mindful of the older population because we do not want them to walk too far when they have to make a transaction. But it is not just a matter of ATM networks.”
“I would not foreclose the issue. It is a commercial issue between the two bank networks, and there are considerations that are not just to do with branding, but some cost-benefit issues involved. There are also, for instance, issues of queues if you were to make everything completely interoperable. But we are not foreclosing the issue from MAS' point of view. I just want to repeat the point that currently, each of the two local banks' ATM networks has a very high degree of coverage. They are competing with each other in the same neighbourhoods, but each of them has got at least 90% of HDB households having access to their ATMs within 500 metres of their homes. But it is something which we would continue to look at.”
“I think that is a good point. The figures I mentioned are based on distances by how "the crow flies". I am not sure if this is wild crows or domestic crows, but I can check on that and let the Member know. It does make sense to look at walking distances and, in fact, we are using third-party software to try and estimate how long it takes and how far it is on walking routes in the various neighbourhoods.”
“DBS has also partnered eight other large retailers, such as Giant, Sheng Siong, Cold Storage and SingPost outlets to provide cash-back services. So, to repeat, there has been a very significant increase in the ATM network in the last decade. There are currently, if I add the cash-back services and other banking touchpoints that exist, there are currently more than 3,600 banking touchpoints across the island. These are bank branches, ATMs and non-bank cash withdrawal points, taken together. Nevertheless, we continue to monitor the accessibility of basic banking services in Singapore for different segments of the population. We know that the older population will become increasingly important. We also continue to work with the banks to promote awareness of the various other touchpoints besides the banks and ATMs. And we continue to promote, particularly for the younger and middle-aged population, the use of digital payments and other digital basic banking services.”
“I thank Dr Tan Wu Meng for his question. First, let me say that we have seen a very significant increase in the number of automated teller machines (ATMs) over the last decade. In fact, the total number of ATMs increased by 65% in the 10 years to 2015. Taken as a percentage of the resident population, the number increased by 47%, a very significant increase over 10 years. As a result, 90% of Housing and Development Board (HDB) households have a local bank ATM within 500 metres of their homes. If I compare this, for instance, to Hong Kong, which is the closest to us as a densely populated city-state, the coverage of ATMs in Singapore is about 38% greater on a geographical basis, in other words, per kilometer (km), and also significantly higher on a per capita basis. This coverage that I have mentioned is based on households' access to two local bank networks, that is, the Development Bank of Singapore (DBS)/Post Office Savings Bank network on one hand, and the United Overseas Bank/Overseas Chinese Banking Corporation network on the other. But each of these two ATM networks has a high coverage in their own right. In other words, each of them has at least 90% of HDB households having access to their ATM networks within 500 metres of their homes. Furthermore, I should say that ATMs and bank branches are not the only ways in which people get convenient access to cash, and access to cash is, in fact, the main usage of ATMs today. Cash-back services at retail outlets enable customers to make cash withdrawals from their bank accounts when they make purchases at these outlets. For example, the three local banks have partnered 7-Eleven stores to provide cash-back services. That is quite convenient because they are in most neighbourhoods.”
“The statistics are set out in the table below. The Monetary Authority of Singapore (MAS) does not collect information on whether a representative (rep) is working on a part-time or full-time basis.”
“The statistics are set out in the Table below:3”
“Financial institutions (FIs) used to offer reverse mortgages (RMs) to borrowers, but they have stopped because of low demand. Low demand for reverse mortgages is not unique to Singapore. In the United States, only 2% to 3% of eligible homeowners take up reverse mortgages.2 Notwithstanding, property owners have other options to monetise their properties – rent out a spare room or the entire property, right-sizing possibly with the Silver Housing Bonus, or apply for the Lease Buyback Scheme. Private property owners may also obtain mortgage equity withdrawal loans, subject to FIs’ credit assessment and underwriting standards. As our population ages, behaviour patterns may change. The Government will continue to review its policies to see if more monetisation options can be facilitated.”
“MAS adopts a proportionate approach which takes into consideration the nature and responsibilities of a person in determining the relative emphasis and standard expected of that person. In the case of ex-offenders, MAS would also have regard to the seriousness and circumstances of the offence, the time that has elapsed since their conviction, and the duties and responsibilities to be assumed. Like other financial regulators, MAS has the power to issue prohibition orders (POs) to prevent persons with serious criminal convictions, such as dishonesty, fraud, and criminal breach of trust, from working in the financial advisory, insurance and capital markets industry for a specified period of time. Such actions serve as deterrents and help to uphold high standards of honesty and integrity in the financial sector. Individuals who have been issued POs may still be considered for positions in the financial industry after the expiry of their POs.”
“A critical success factor for the financial industry is the trust that depositors, investors and policyholders place in financial institutions (FIs). The Monetary Authority of Singapore (MAS) expects employees and representatives of FIs to be fit and proper in order to safeguard the interests of consumers as well as to uphold Singapore’s reputation as a trusted financial centre. MAS has no rules against the hiring of ex-offenders for positions in the financial industry. MAS has issued guidelines on its expectations and criteria for what it means to be "fit and proper". To date, MAS has not found any FIs to be in breach of the due diligence requirements set out in these guidelines. FIs are responsible for their own hiring decisions and ensuring that the persons they employ are fit and proper. They perform their own due diligence on potential candidates and do not have to inform MAS of candidates that they have hired or rejected. There are two exceptions to this rule. For key positions in FIs, such as chief executive officers (CEOs), board directors and selected senior management roles, FIs are required to seek MAS' approval for their appointments after assessing them to be fit and proper. Secondly, FIs are also required to notify MAS before appointing representatives to conduct financial advisory and capital market activities. For such positions, MAS does not automatically reject an FI's application just because the candidate is an ex-offender. MAS’ guidelines also make clear that a candidate who fails to meet any particular criterion is not automatically deemed as being not fit and proper.”
“MAS and CAD are continually enhancing their enforcement capabilities to detect and investigate market abuse and misconduct, including the use of data analytics and digital forensics. MAS and CAD have also taken tough enforcement actions to deter securities fraud. Between 2011 and 2015, MAS took 21 civil penalty actions against market misconduct offences under the Securities and Futures Act. Over the same period, CAD prosecuted a total of 34 persons for false trading and other serious market misconduct. Given the complexity of most instances of securities market fraud, investigations take time. The amount of evidence that needs to be gathered and analysed, such as bank accounts and transactions, is typically large. If suspects and witnesses are not available or uncooperative, it adds to the length of investigations. These are challenges that cannot be directly addressed by merely increasing resources. The resources that Singapore has devoted to investigating market misconduct offences are commensurate with the market capitalisation and number of listed companies in our securities market, and comparable with other developed markets, such as Hong Kong and Australia. More important than the numbers are the quality and type of resources we have to detect and investigate capital market crimes. The approach taken by CAD and MAS is to focus on having dedicated units equipped with specialised skillsets that look into securities fraud-related crimes and to continually Page: 132 deepen expertise and capabilities.”
“Singapore has robust safeguards against attempts to manipulate or rig our capital markets. There are strict rules in place and our regulatory regime against market misconduct is comparable to those in other developed markets. But it is not possible to have safeguards that can prevent all misconduct, which is why we have an effective enforcement regime to ensure that any market misconduct is swiftly detected, thoroughly investigated and firmly dealt with. In the most recent Financial Sector Assessment Report on Singapore, the International Monetary Fund rated our regime very favourably. The Singapore Exchange (SGX), the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) work closely together in investigating suspected fraud in our capital markets and taking enforcement actions. SGX is the frontline supervisor. It monitors trading activities and conducts preliminary assessments of possible market misconduct, using electronic surveillance systems. SGX recently enhanced its "Trade With Caution" alerts by providing investors more detailed information on unusual trading activities. Such alerts serve to disrupt at an early stage any efforts at market manipulation by those who may be responsible for the unusual trading activities. Besides referrals from SGX, MAS and CAD also receive market intelligence on suspected misconduct from interactions with financial institutions and market participants, suspicious transaction reports lodged with CAD, and public feedback. MAS and CAD conduct joint investigations on securities market misconduct, such as insider trading and market manipulation. This close interagency cooperation leverages MAS' expertise in financial markets and CAD’s experience in investigating financial crime.”
“The debt servicing ratios7 of Singapore resident households have improved since the introduction of the Total Debt Servicing Ratio (TDSR) framework in June 2013. In particular, the debt servicing ratio for the 20th income percentile household has fallen to 17% in 2015, from 22% in 2013 (see Table 1 below). The debt servicing ratios for the median and 90th income percentile households have also edged down slightly to 34% and 44% respectively in 2015, from 35% and 46% respectively in 2013. The Monetary Authority of Singapore (MAS) has taken a series of measures in recent years to encourage financial prudence among Singapore households. Measures like the TDSR and loan-to-value ratios aim to help borrowers avoid taking on excessive leverage for their property purchases. MAS has also introduced regulations on unsecured credit to help individuals with credit problems avoid accumulating further debt. These measures have helped to moderate the annual growth in household debt to 2.5% in the second quarter of 2016, down from about 7.4% over the last five years. Since the introduction of the industry wide borrowing limit on unsecured credit in June 2015, the number of borrowers with outstanding unsecured debt exceeding 24 times their monthly income has more than halved, to less than 1% of all unsecured credit borrowers. MAS will continue to monitor debt-servicing ratios and household leverage and promote responsible borrowing.”
“For vulnerable customers with limited knowledge of investment products, supervisors of FA representatives are required to take the additional step of calling the customers before the transaction can be executed. If the product is a complex one, the FA's senior management must confirm with the customer that he or she has been properly informed of the risks of proceeding with the investment. Such follow-ups also serve as an additional opportunity for vulnerable customers to state if they wish to proceed with their transactions, having understood the risks of the products. But it is not just about what is provided under the law. Over the past few years, some FAs have made efforts to strengthen their advisory and sales processes beyond what is required under the law. For example, the forms and sales documents used by some FAs are available in different languages to help customers who are not well-versed in English. FAs also encourage vulnerable customers to bring along a relative or friend whom they trust and who is able to explain to them what is being presented by the representative. Some FAs have made it mandatory for their representatives to seek senior management's approval for all transactions entered into by vulnerable customers even where the product is not complex. While the industry has made positive strides over the past few years, we need to continue raising the bar. MAS will continue to work with the industry to improve the quality of advice and competencies of FA representatives. We will also share common observations and weaknesses from our supervisory reviews and spread best practices that go beyond strict regulatory requirements.”
“The Monetary Authority of Singapore (MAS) shares Mr Zainal Sapari's concern about the need for proper selling procedures when financial advisers (FAs) deal with the elderly or vulnerable in our population. Let me explain our current system of safeguards. FAs and their representatives, including FA representatives in banks, are regulated under the Financial Advisers Act. The Act provides for safeguards for investment products sold to any member of the public. It also specifies additional safeguards when dealing with vulnerable customers. First, assessing product suitability. Before an investment product can be marketed to customers, FAs are required to assess the nature of the product and identify the customer segments for which it is suitable. FAs are then required to ensure that their representatives bear in mind which products are suitable for each of the customers they deal with. Second, information disclosure. FA representatives must disclose to customers material information on a product, especially the potential risks and benefits, and all applicable fees and charges. Such disclosures must be clearly communicated to customers to enable them to make informed investment decisions. It is an offence under the Act for FA representatives to omit or make false or misleading disclosures to customers. Third, additional supervisory checks within an FA agency. Before a sale can be completed, supervisors of FA representatives are required to check their recommendations to ensure that the advisory process has been properly conducted, and that the products recommended are suitable for customers.”
“By investing in much-needed infrastructure in Asia, AIIB plays an important role in helping to increase the economic competitiveness and vibrancy of the region. An economically vibrant region, with greater trade, investment and business opportunities, will benefit Singapore as well as the Page: 172 companies based here.”
“Since its establishment on 25 December 2015, the Asian Infrastructure Investment Bank (AIIB) has been focusing on recruiting staff, putting in place financial and operational policies and developing a strong project pipeline. AIIB has achieved some early success. The AIIB Board of Directors recently approved in June for the Bank to finance the first four projects worth over US$500 million. Three of the four projects will be co-financed with other multilateral development banks, namely, the Asian Development Bank, the European Bank for Reconstruction and Development, and the World Bank. These include (i) a motorway in Pakistan; (ii) a highway in Tajikistan, and (iii) a slum upgrading project in Indonesia. The fourth, financed entirely by AIIB, involves a power distribution system in Bangladesh. More projects are being considered, with AIIB targeting to lend up to US$1.2 billion to finance five to 10 projects in 2016, and double that in 2017. Over the medium term, AIIB will also look to crowd-in funding from the private sector. This will contribute additional market expertise and financial discipline to the managing of future infrastructure projects. AIIB is an important addition to the international financial architecture. Singapore has long-standing cooperation with other multilateral development banks like the World Bank and the Asian Development Bank. Joining AIIB further complements Singapore’s role as an international financial centre and an urban development hub for the region. Asia's infrastructure needs are large and growing. Our companies can seek partnership opportunities with AIIB by bidding for infrastructure projects, or providing advisory services, such as project structuring and urban planning.”
“As a further safeguard for investors, MAS has introduced a new requirement for SCF platform operators that are intermediating small offers to disclose the key risks of SCF investments. These operators will also be required to obtain investors’ acknowledgement that they have read and understood these risks before they can proceed to invest. However, I have to emphasise that SCF investors have to exercise due care and must, ultimately, bear responsibility for investment risks. SCF operators are expected to deal fairly with investors in the conduct of their business. Where a licensed intermediary is found to have breached MAS’ rules, supervisory measures will be taken, ranging from enhanced audits to revocation of licence.”
“The Monetary Authority of Singapore's (MAS') new regulatory framework supports securities-based crowdfunding (SCF) as an alternative source of financing for startups and small and medium enterprises (SMEs). It does so in Page: 154 two ways. First, MAS has simplified an existing rule that allows companies raising less than $5 million within 12 months (small offers) to do so without a prospectus. Under the existing rule, SCF platforms assisting companies to raise funds were required to ascertain that investors have the knowledge, experience and are suited for SCF investments. Most retail investors would have difficulties meeting all three requirements. With the simplified rule, SCF platforms need to ascertain that investors meet any one of the three requirements to be able to have access to SCF investments. It will expand the potential investor pool for SCF investments. Second, MAS will reduce the financial requirements for SCF platforms that raise funds from only accredited and institutional investors and do not handle customers’ monies. Both the minimum base capital and operational risk requirements for such intermediaries will be reduced to $50,000. The previous requirements were $250,000 and $100,000 respectively. The requirement for a $100,000 security deposit will also be removed. But SCF investments are not without risk. MAS’ SCF regulatory framework seeks to strike the right balance between widening access to funding for startups and SMEs and protecting investor interests. All SCF platform operators seeking to operate in Singapore will require licensing by MAS. MAS will admit only platform operators that are assessed to be fit and proper. They are required to ensure proper segregation of investors’ monies and keep proper records of transactions.”
“Going forward, we must continue to build a revenue structure that allows us to meet important spending needs, while ensuring that we maintain our economic competitiveness as well as keep our overall system of taxes and benefits progressive and fair. Third, and most fundamentally, sustainable Government finances depend on whether we have a healthy and growing economy. The recommendations of the Committee on the Future Economy, and the Industry Transformation Programme that we have embarked on, are key to growing the economy and creating good jobs for our people. This is the key way to grow our revenues sustainably.”
“The Net Investment Returns (NIR) framework is based on the expected long-term real rates of return on the reserves invested by the Government of Singapore Investment Corporation (GIC), Temasek Holdings, and the Monetary Authority of Singapore. The expected long-term rates are used because the NIR framework seeks to smooth out budgetary spending across market cycles, in other words, to ensure we do not overspend in bull markets, or face a shortage of funds during a market downturn. If there were to be a long term deterioration in the investment environment, in other words a secular rather than cyclical deterioration, we would expect a downward adjustment to the expected long-term rates and, hence, a lower NIR Contribution (NIRC) to the annual Budget. The investment entities and the Government are each studying the possible scenarios for the long-term environment. We cannot rule out a scenario of lower expected long-term rates. It is an added reason why the Government has to continue to review both our revenues and expenditures to ensure sustainability. First, even as we recognise the rising needs of an ageing population, we must remain prudent in our spending and emphasise value-for-money in every programme. We must continually transform the delivery of Government services to be more productive and innovative in achieving better outcomes. Second, we must continue to build up our revenues for the long term. I should highlight that although NIRC is a sizeable revenue item, our operating revenues (comprising tax revenues as well as fees and charges) continue to serve as the primary source of our total revenues, at slightly over 80%.”
“The standard terms and conditions used in Government contracts for goods provide safeguards against "lemons". In particular, the supplier is required to completely repair goods that are found on delivery to be damaged, defective or in any way inferior to approved samples, or not in accordance with the contract. Further, in the event of significant defects, the supplier has to fully replace the goods. All repair and replacement costs, including the cost of returning the defective goods, are borne entirely by the supplier. Typically, payment is only made after the goods have been delivered in good condition to the Government. In addition, it is the norm for Government contracts to include warranty clauses which require the supplier to repair or replace faulty goods during the warranty period even after payment has been made.”
“Our support for families also goes beyond monetary support and includes our wider push to make it easier for families to manage their work and family responsibilities. For example, in 2013 we introduced Child Care Leave for parents of older children aged seven to 12 years and introduced one week of paternity leave. This year, we announced the legislation of a second week of Government-paid paternity leave for all fathers of citizen children born from 1 January 2017 and an increase in Shared Parental Leave from one week to four weeks for citizen children born from 1 July 2017. With all these measures, the Government remains committed to supporting Singaporeans in fulfilling their marriage and parenthood aspirations.”
“The personal income tax relief cap makes our personal income tax system more progressive. We currently have 15 personal income tax reliefs. Each tax relief serves a worthy objective. However, taken together, the tax reliefs may unduly reduce the taxable income for a number of individuals with high incomes. After studying the reliefs being claimed, we decided to limit the total reliefs that one individual can claim to reduce taxable income, in order to preserve the progressivity and fairness of our tax structure. The relief cap of $80,000 is set at a level that will not affect 99% of tax resident individuals. A majority of working mothers will not be affected. In fact, among those currently claiming the Working Mother's Child Relief (WMCR), nine out of 10 are expected to continue to claim it fully, without being affected by this cap. This includes those with more children – slightly over eight in 10 individuals claiming WMCR on two or three children are not expected to be affected by the cap. Beyond tax reliefs, the Government provides a comprehensive suite of measures to support Singaporeans in having and raising children, managing work and family commitments, and sharing parental responsibilities. Over the years, we have introduced and significantly enhanced various schemes to support parents in having and raising children. This includes the Baby Bonus Cash Gift, Child Development Account (CDA), MediSave Grant for Newborns, Foreign Domestic Worker Levy Concession and also the newly introduced CDA First Step. We also provide significant subsidies for education, from preschool level through to the institutes of higher learning.”
“As corporate tax returns for the financial year (FY) ending 2015 are only required to be filed by 30 November 2016 , the effective tax rates for companies relating to FY2015 or Year of Assessment (YA) 2016 are not available yet. The corporate tax rate of 17% is applied to the chargeable income of a company to arrive at the tax payable. Chargeable income is derived after making the necessary adjustments to accounting net profits, such as for non-taxable gains of capital nature, unutilised losses carried forward from past years, as well as for allowable and non-allowable tax deductions and tax allowance. A company's effective tax rate can be lower than 17% of its chargeable income due to a variety of factors, for example, corporate tax rebates that impact firms with different levels of profits differently and tax credits allowed for foreign-sourced income which is remitted to Singapore. It may also reflect tax incentives granted for limited duration for qualifying economic activities in Singapore. As each company's situation is different, rates of effective tax payable may vary across years and across industries. In general, effective tax rates among different industries vary by between one and two percentage points from the average across all industries.”
“The Monetary Authority of Singapore (MAS) expects banks to carry out thorough security threat assessments for all their branches and ensure that they have appropriate measures in place to mitigate security risks. Following the recent robbery, MAS and the Singapore Police Force (SPF) have reminded banks to conduct regular threat assessments and to enhance security measures where necessary. These measures include ensuring closed circuit television systems and panic alarms are in good working order, as well as deploying armed security personnel to safeguard premises that are assessed to be high-risk or vulnerable. In addition to adopting security measures, banks are reminded that in the event of a robbery, the safety of employees and customers is paramount and that bank staff should be properly trained to act in an appropriate manner and to call the Police only when safe to do so. MAS is also collaborating with SPF and the Association of Banks in Singapore on enhancing physical security best practices, including drawing on learning points from this recent incident.”
“Together, the new department will enhance MAS' ability to anticipate, detect and investigate serious regulatory breaches, as well as tackle money laundering and terrorist financing risks as they continue to evolve.”
“This is because different financial activities and institutions vary with regard to the nature of the business and their customer bases and, consequently, face different money laundering and terrorism financing risks. The risk management systems and controls adopted by a financial institution should, therefore, be suited to its business and commensurate with its risk profile. With a financial centre that comprises more than 1,500 financial institutions, it is not possible to prevent regulatory breaches and misconduct, even with intrusive supervision. A strong enforcement capability is, hence, necessary to investigate and take swift action where there are breaches of the law. Enforcement helps shape the behaviour of market participants, by deterring unethical behaviour and complacency. The new Enforcement Department consolidates the current resources and expertise within MAS that is devoted to the investigation of breaches in the rules and regulations administered by MAS. The department will expand its ambit beyond capital market misconduct offences, to include the banking and insurance sectors. It will coordinate efforts with MAS supervisors in various sectors within the financial industry, to detect and investigate serious lapses or instances of misconduct. The Enforcement Department will also aggregate and review different pools of information from across different financial sectors to anticipate risks, identify patterns and investigate potential misconduct and market abuses. The department is stepping up the use of data analytics to enhance market surveillance to help identify potential market misconduct and investigate specific offences.”
“The Monetary Authority of Singapore (MAS) has in place strict anti-money laundering and countering the financing of terrorism (AML/CFT) rules for the financial sector. They are closely aligned with international standards. The rules require financial institutions to conduct robust "know-your-customer" (KYC) checks, monitor customers’ transactions on an ongoing basis, and file suspicious transaction reports with the Commercial Affairs Department when suspicious activities are detected. The task at hand is, therefore, not about imposing more or stricter rules, but strengthening the financial sector's implementation of existing regulatory requirements. The recently established AML Department within MAS will consolidate and enhance our AML/CFT supervisory resources. It will provide a dedicated supervisory focus with regard to financial institutions' compliance with MAS’ AML/CFT rules and raising industry standards. This consolidated function will engage actively with the industry to share perspectives on emerging money laundering and terrorism financing risks and typologies, as well as best practices in AML/CFT controls. It will also conduct more frequent focused inspections of financial institutions identified as facing higher risks in this area. MAS will take regulatory actions against those financial institutions whose AML/CFT practices fall short of the expected standards. MAS will also make public its sanctions against persistently or egregiously errant financial institutions. While certain responsibilities, such as robust KYC checks, are common to all financial institutions, it is not possible to standardise AML/CFT frameworks, systems and processes.”
“The Building and Construction Authority (BCA) operates a Contractors Registration System which registers construction companies under various work categories and financial grades. All construction companies must be registered to qualify for the award of public tenders. This means that construction companies are first prequalified to ensure they meet certain standards before they can be awarded Government contracts. In general, higher value construction contracts require companies to meet higher standards in terms of financial capacity, technical capability of the company and its personnel, company certifications and relevant track record. For example, companies bidding for construction contracts above $200 million will only compete amongst other companies which have attained similar or higher technical and financial standards. For construction contracts above $200 million awarded in the last three years, two-thirds were awarded to the lowest price bidder. As a signatory to the World Trade Organization’s Agreement on Government Procurement (WTO-GPA) and various free trade agreements, Singapore is required to ensure fair competition and non-discrimination between foreign and local suppliers. Our procurement regime is, therefore, an open one where suppliers compete based on their ability to meet tender requirements, regardless of nationality. This applies also to competition to be on the prequalification list that I just referred to. For these reasons, BCA does not track the nationality of the ultimate owners of companies awarded tenders.”
“From time to time, public sector agencies may require temporary staff to support ad hoc projects or cover those on leave. To meet such temporary demands, one avenue is for agencies to procure manpower services from employment agencies. VITAL, as the Government's shared services provider, will consolidate the demands of Public Service agencies and establish a Public Service-wide contract so that agencies may procure from the contract efficiently, as and when they require such services. Like most other Government tenders, the demand aggregated contract for outsourced manpower services is called through open tender on the Government Electronic Business, or GeBIZ, procurement portal. All the employment agencies in VITAL's service-wide contracts are required to comply with prevailing laws, including the Employment Act, Central Provident Fund Act, Child Development Co-Savings Act, Skills Development Levy Act and Work Injury Compensation Act. Hence, workers under VITAL's service-wide contracts would enjoy the employment entitlements covered by these regulations, including leave, medical and overtime benefits and adequate termination notice. VITAL works closely with the Ministry of Manpower (MOM) to ensure that the employment agencies comply with the law. In addition, any feedback on non-compliance will be investigated. If substantiated, depending on the severity of the non-compliance, the contract with the employment agency may be terminated. VITAL is also aware of and are looking into how the latest guidelines, recently released by MOM, the National Trades Union Congress and Singapore National Employers Federation on 20 June 2016 can be adopted.”
“The Government had introduced the foreign maid levy relief to encourage married women to stay in the workforce. For this reason, other individuals, including, singles are not eligible for the foreign maid levy relief. Nonetheless, singles, whether men or women, can apply for the foreign domestic worker concessionary levy if they have young children, or are living with family members who are aged or have disabilities, as long as qualifying conditions are met. We have also reduced the levy over the years, most recently in Budget 2015, where the concessionary levy rate was halved from $120 to $60 a month.”
“To qualify as a dependant for tax reliefs, such as Working Mother’s Child Relief, the dependant should be financially dependent and not be earning any income. However, as a concession, we have allowed dependants who derive incidental income to qualify as a dependant for tax relief purpose, if their income is not more than $4,000 a year. This income condition applies to all dependants, including parents and spouses, and not just children who work part-time or are NSFs. We do not exclude any category of income from this threshold in determining whether the dependant's income exceeds $4,000, so as to be consistent and equitable in the treatment of all income of dependants. The income threshold for the relief was last doubled to $4,000 in Budget 2010. We will review this threshold from time to time.”
“If we simply set 70% as the weightage for "Quality" factors, but they do not allow us to differentiate the ability of the tenderers to provide the cleaning, security or landscape services, then the tenderers may end up being assessed with the same "Quality" scores, and it will still end up with competition based on price. Page: 79 We share Mr Zainal Sapari's interest in uplifting the cleaning, security and landscape sectors and in improving the working conditions of workers. To achieve these objectives in a sustainable manner, the Government has supported the adoption of the Progressive Wage Model which the tripartite partners have agreed to. We had taken the lead to procure only from cleaning service providers who adopt the wage model, even before it became a licensing requirement. We have also taken onboard feedback to use less prescriptive and less headcount-based tenders. As mentioned in MOF's Committee of Supply response earlier this year, we are now working with the respective lead agencies and industries to progressively introduce outcome-based procurement in the cleaning, security and landscape sectors over time. This would allow tenderers to consider using technology and innovative solutions. Along with this, we will also increase the emphasis and weightage placed on the "Quality" factors which reflect the tenderers' ability to provide the service, such as manpower productivity of the tenderers and the quality of their workforce.”
“The use of the Price-Quality Method, where procurement decisions are made based on a combination of both "Price" and "Quality" factors, has been in practice in the Public Service for many years. However, its adoption and the weightage of the "Quality" factors used vary from procurement to procurement, depending on the context of each procurement. For example, the evaluation criteria for cleaning services for office premises will be different from those required for street and expressway cleaning. In fact, the need to cater to the different context of the procurement was also acknowledged in the Best Sourcing Practices Advisory published by the Tripartite Committee for Low-Wage Workers and Inclusive Growth (TriCom), where it was noted that while buyers "should aim towards achieving a weightage of 30:70 between Price and Quality criteria respectively… the weightage may be adjusted based on the needs of your organisation". For tenders called in the cleaning, security and landscape sectors, "Quality" factors were considered in the award of all the tenders called in 2015 and 2016. For these tenders, where weightages were explicitly specified, the "Quality" component made up 20% to 70% of the total evaluation criteria. We agree that security, cleaning and landscape services should not be procured based on price alone and we are further reviewing the emphasis placed on "Quality" factors in the evaluation of these tenders. However, even as the TriCom recommended that buyers should aim towards achieving a 3070 Price-Quality weightage, it also recognised that there is no ideal price-quality weightage that is suitable for all situations. What goes into the "Quality" component must be relevant to the tenderers' ability to provide the required service.”
“There can be no precise answer to both questions. First, I think this is a complication in the ratification of the Free Trade Agreement with the EU. It does not rule out early ratification but we know the distractions that are taking place in Europe. We are pushing them, we are in constant touch with them, both diplomatically as well as amongst our trade officials. But this is a bit of a setback. With the UK, I think we should always remain open to a free trade agreement. I do not want to prejudge obviously what happens between the UK and Europe. If the UK does go ahead with its exit from the single market and decides to have a free trade agreement with Europe, it will be, of course, very keen to also have free trade agreements with other third parties like ourselves. It is something which we are in constant touch with the British on. Page: 40”
“I would like to thank Dr Neo for her question. First, we have to always, when we think of currency in the Singapore context, distinguish between the bilateral currency movements and the movements of the Singapore dollar against the trade-weighted basket. Bilaterally, it is true that we have strengthened very significantly against the British pound. In fact, we have got a stronger exchange rate against the pound, compared to any time in the last 35 years. That is because the pound has collapsed in global markets. But if you look at the Singapore dollar against a basket of currencies, it has not moved very much. In fact, it has depreciated slightly because the US dollar and Japanese yen have strengthened in global markets. So, essentially, this is typical of any instance that happens in the global markets, where you find that the bilateral rates move quite significantly, but, on balance, when you look at the Singapore dollar across the whole basket of currencies, it moves in a fairly moderate fashion. In this instance, the movement has been quite contained.”